Draft bill outlines role of financial regulators for crypto, digital assets market

House Financial Services and Agriculture Committee leaders released a discussion draft of legislation to regulate cryptocurrency and other digital assets, in advance of Tuesday’s joint committee meeting on the future of digital assets.

The legislation addresses an America’s Credit Unions’ priority for digital assets by allowing credit unions to offer digital asset services and granting the NCUA or a state credit union supervisor the authority to supervise and regulate such services.

“Our priority throughout the discussion of digital assets legislation has been ensuring that all the various proposals treat credit unions equally with other financial institutions, ensuring our members have the opportunity to take advantage of new emerging technologies and products,” said America’s Credit Unions Chief Advocacy Officer Carrie Hunt. “We are reviewing this proposal to ensure it meets that requirement.”

Under the legislation, a credit union regulator may not require:

• A digital commodity or stablecoin to be listed as a liability on the financial statement or balance sheet of the credit union;
• A credit union to hold regulatory capital against assets, including reserves backing such assets, in custody or safekeeping, except as necessary to mitigate against “operational risks inherent with the custody or safekeeping services, as determined by the regulator;” and
• A credit union to recognize a liability for any obligations related to activities or services performed with respect to digital commodities that it does not own if that liability would exceed the expense recognized in the income statement as a result of the corresponding obligation.

The draft bill also expands the role of the Commodity Futures Trading Commission and curtails the authority of the Securities and Exchange Commission.

The joint Tuesday hearing, “American Innovation and the Future of Digital Assets: A Blueprint for the 21st Century,” is scheduled to begin at 10 a.m. Eastern.

America’s Credit Unions wrote a letter for the hearing Monday, noting the subcommittees "must be careful not to unintentionally
create an uneven playing field among credit unions, banks, and non-depository institutions by establishing regulatory frameworks which rely exclusively on bank-centric models for regulation."

will engage with the hearing and advocate for the ability of credit unions to offer digital asset services. It previously supported the House Financial Services Committee-passed STABLE Act (H.R. 2392), which would create a digital assets framework and allow credit union subsidiaries, including credit union service organizations, to serve as an appropriate subsidiary entity to issue stablecoins.